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RIM profits nearly sliced in half

Blackberry maker circles the drain

Research in Motion’s shares have fallen sharply after the Blackberry maker reported that profits were down 47 per cent for its second quarter of the fiscal year.

Adjusted net income for the quarter was $497 million, down from $797 million this time last year. Revenue fell 15 per cent compared to last quarter, to $4.2 billion, and it was down 10 per cent from this time last year. The company’s cash reserves have fallen to $1.4 billion, after the company sent $1.5 billion on Nortel’s patent bundle.

“We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products,” read a canned statement from Jim Balsillie, Co-CEO at Research In Motion.

“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models. “We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year.”

PlayBook tablet sales were well below what the company would have liked, he said, with the firm selling 200,000 over the last three months compared to 500,000 in the previous quarter. Balsillie said that sales of the BlackBerry 7 phones have cut into PlayBook sales for the quarter, since demand for the new smartphones was strong.